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Philanthropic Accountability: Where Do DAF Dollars Go?

Sponsors, Stewardship, and Transparency

The charitable giving vehicle known as a Donor Advised Fund (DAF) is charging forward at record speed. According to the National Philanthropic Trust, the largest recipients of charitable funds in the country presently are DAF sponsors. A DAF sponsor, like Faithful Journey Foundation, is responsible for holding, investing, managing, and, eventually, distributing the contributions a donor makes into a DAF.

Although the popularity of DAFs is not surprising given the many benefits it provides to donors, it is imperative that we, as Kingdom-minded investors, are aware of how our money is being stewarded. Are the charities we aim to bless actually benefitting from our use of a DAF?

Until recently, very little data was available to discover just how beneficial DAFs are—or are not—for the charitable organizations they are designed to serve. Currently, we are seeing an upward trend in available data. The recently established Donor Advised Fund Research Collaborative (DAFRC) has released these key findings from 2021:

DAF Research Collaborative Key Findings in 2021

For the 13,000 DAF accounts analyzed:

  • The median annual payout rate was 11%.
  • Most DAF accounts (52%) have four-year average payout rates between 5% and 49%.
  • Over a four-year period, 86% made at least one grant.
  • 79% of DAFs are expected to grant all of their initial contribution within 15 years.

The Future of DAFs

The overwhelming capital—$159.83 billion to be precise—reported in 2020 to collectively have accumulated in DAFs has raised eyebrows among critics, and the call for government intervention and regulation has become louder. You may have heard about the Accelerating Charitable Efforts (ACE) legislation recently brought before Congress. Such legislation would insist on individual grant minimums for DAFs, similar to private foundations. Navigating any potential changes to your current DAF, if you have one, does not need to be complicated. If you do not presently have a DAF, we want you to feel confident that you can find a DAF sponsor to steward your money well and paired with biblical integrity. We will give you the expert advice you need to make an informed, wise, and discerning selection.
DAF Research Collaborative Key Findings in 2021

At Faithful Journey Foundation, we answer to God, the highest authority. We are compelled and guided by biblical principles that are the foundation of every aspect of our services to you. You can feel confident that we will work with companies who share our values. Biblically responsible screens exclude companies that endorse or profit from industries not aligned with Christian values. We want to partner with you in making an impact with your charitable giving, and we believe DAFs are a powerful vehicle for supporting God-honoring causes. With our guidance, you can trust that your funds will go where you intend.

Sources: https://nonprofitquarterly.org/new-data-tells-us-where-donor-advised-fund-dollars-go-and-dont-go/
Highlights from the 2021 DAF Report
https://static1.squarespace.com/static/6011def87418a462fcb03978/t/6242d5b62b2ff70cccde478c/1648547257883/DAFRC+Patterns+and+Trends+Report.pdf